We’ve recently heard from the UK’s Competition and Markets Authority about price and discount claims in the UK.  Now, the Court of Justice of the European Union has weighed into the debate regarding practices in the EU.  It has ruled that a price reduction in an advertisement must be calculated on the basis of the lowest price charged in the last 30 days. It is not sufficient simply to provide the lowest price in the last 30 days somewhere in the advert.

The case concerned the German consumers’ association taking Aldi Süd to court in Case C-330/23  Aldi Süd over how the retailer advertises its price reductions or “price highlights” in its weekly brochures, particularly for items like bananas and pineapples.

The association argued that Aldi Süd shouldn’t base its advertised price reductions on the price immediately before the offer (e.g., €1.69). Instead, under EU consumer laws, the reduction should be calculated based on the lowest price charged in the last 30 days (e.g., €1.29), which is often the same as the so-called “reduced” price. They argued that simply stating the lowest price in the last 30 days in the advertisement isn’t enough. The same rules apply to describing a price as a “price highlight.”

The German courts referred the case to the CJEU. The Court clarified that any price reduction claims, whether shown as a percentage or a promotional statement highlighting the offer’s advantageous price, must be based on the lowest price the trader applied during the 30 days before the reduction. This prevents traders from misleading consumers by artificially inflating prices before announcing a “reduction,” thus ensuring genuine discounts.

The position in the EU contrasts with the UK approach which is set out in the Chartered Trading Standards Institute (CTSI)’s “Guidance for Traders on Pricing Practices” This guidance removed a rule similar to the EU position in favour of a list of non-exhaustive factors to consider in determining whether a price reduction is genuine.  These include considering how long the product was on sale for at the higher price compared with the lower price and whether significant sales were made at the higher price before the price comparison was made.  In addition, the Competition and Markets Authority recently published guidance on pricing discounts for online mattresses retailers, which are likely to apply to other sectors. The CMA is currently reviewing pricing in retailers, especially loyalty card pricing, and has said that it will publish new guidance in November. The CTSI has said that it is open to updating its guidance to accommodate loyalty card pricing.

If you trade with consumers in both the UK and EU then you’ll need to comply with both sets of pricing laws.  Further, those trading with UK consumers should take heed as the bolstering of the CMA’s powers to enforce consumer law will come into force next year, including CMA having the direct power to levy substantial fines on traders breaching UK consumer protection law.